The Annual Performance Review: a Pointless Process or One Worth Improving?

By March 3, 2020 General

There’s nothing that causes anxiety in the workplace quite like the annual performance review—regardless if you’re on the receiving end of the review or the manager required to give it. 

W. Edwards Deming saw the performance evaluation process as so flawed that coined it as one of the “deadly diseases” of organizations. He thought they should be abolished (albeit for another preferred system). 

So if people don’t like them—and respected management gurus abhor them—then why do we persist? 

The answer is simple: we all need feedback, and we benefit from thoughtful guidance on how to develop professionally if we’re going to reach our potential. 

And unlike Deming, I think it is valuable—if done the right way. 

However, the problem remains that many managers are stuck in their old ways, viewing this more as a dreadful obligation rather than the opportunity it presents.  

Losing people in “the process”

Deming was a brilliant man who understood systems and theories better than most. His belief was to focus on why things did or didn’t work as they should, and to improve those processes. From his perspective, it is the system you work in that drives nearly all of the performance indicators. Fix the system, fix the performance. If you do a job where the work is essentially identical every day, (which is less and less the norm today) then having the process mapped out made your ability to perform that work much simpler. 

If it were only that easy.

Further, people don’t enjoy being viewed as a cog in the machine or system—where it’s literally all about the system. If an employee’s personal performance doesn’t matter, then why stay? That sounds more like a recipe for unintentionally disrupting the process. So instead, many continue with an imperfect performance evaluation. 

Defaults don’t work  

Most managers are woefully ill-equipped to set and meet the expectations for all the people on their team, and even worse at articulating what success looks like for each individual. They may understand what they want in a preferred hire—via the job description and desired competencies —but once in the door, they don’t have a framework for connecting personal growth against required results. Reviews too often become a measure of how well employees match up and perform against the job description, where vague indices such as “meets” or “exceeds” expectations or 1 through 5 ratings are the norm. But what does it mean to be a 4 on a performance review? This type of check-the-box review can be demotivating and cause employees to disengage. It has the appearance that leadership is not invested in their development, just their conformity. 

Perhaps the biggest problem with the annual performance review is that managers take this too literally and wait to give attention to assessing performance annually. That is what makes the process so painful: trying to remember all of the things that happened in the previous year in attempt to make the assessment valuable. 

Instead, real management pros are better positioned at the annual review if they apply an ongoing and manageable approach to assessing team members. 

These three conversational approaches can help frame everything needed for a more robust and less draining performance evaluation:

  • DEFINE EXPECTATIONS TOGETHERwhile there is a job to be done that is non-negotiable, having clear conversations about what that entails, level sets what’s required as well as what’s desired by the employee in terms of feedback and guidance. In most cases this should be a dialogue to create buy-in, not simply a monologue listing of responsibilities from the leader to subordinate.
  • COACHING UP CONVERSATIONS—encouraging, course-correcting, and, when necessary, taking disciplinary action, is the core job of the management pro to help each employee deliver on target results. These are day-to-day and week-to-week conversations that happen at the spur of the moment. Most will be unplanned. By being opportunistic, managers can capture both the achievements and areas for improvement in the moment. Management pros then need to have the discipline to discuss them with the employee and write down the essence of what happened. It can be helpful to have the employee send an email of the conversation where new actions and behaviors will be applied so there is a record of the interaction and progress can be accounted for. 
  • COUNSELING FORWARD CONVERSATIONS—for the employee who is already competent and thriving at their current role, the focus is less on coaching up and shifts to developmental conversations that prepare them for the next opportunity. It’s not about telling them what to do, it’s helping them figure out what needs to happen next in to grow. This includes conversations around questions such as—Do you have capacity to take on more? What do you think about this challenge? How might you approach solving this problem?  The purpose of having these conversations is to help them discover some new understanding of what they need to do differently or better in order to advance.

Anyone who has spent time with kids will attest to the fact that teaching and parenting is not a one-size-fits all approach to helping them maximize their potential—and it’s no different for employees either.

A personalized conversational approach affords the management pro to note what kind of conversation they are having—is it coaching to build competency, or is it counseling to grow and further develop talent? Knowing what conversation to have is important. High performers who may know as much or more than their superior will be more willing to embrace conversations that develop them for what’s next instead of those that coach under current circumstances. Likewise, employees who still need coaching aren’t ready for and can be easily overwhelmed with conversations about what’s next when they haven’t mastered the fundamentals of their current role.  

Management pros who want to develop more meaningful performance evaluations can achieve them with these two disciplines: 

  • The discipline to engage employees on performance conversations frequently (daily, weekly and monthly) and with specificity and relevance, instead of annually. 
  • The discipline to write down and memorialize these conversations for later use in the annual performance evaluation.

Performance reviews need to be relevant. That happens when they become specific and detailed to individual employees and their work. It must evolve from the rote exercise of checking a box because this is how we’ve always done it. If it doesn’t, then Deming is right—it’s unnecessary, and probably counter-productive. But today’s management pro can and should do better. It requires discipline to lead a diverse team to achieve personal and business goals. The performance review, when leveraged well, becomes a welcome personalized experience that guides all employees on a road to success.

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